Health Headlines: September 2025

Twelve years after causing a government shutdown, funding for key Affordable Care Act (ACA) provisions is again at the center of government funding negotiations with a potential shutdown approaching. During the COVID-19 pandemic, Congress expanded tax credits to subsidize ACA health plan premiums in an effort to expand health insurance coverage for Americans amid the public health crisis. Specifically, Congress removed the income cap on eligibility for tax credits for ACA plan enrollees with incomes higher than 400% of the federal poverty line, and Congress limited premiums to no higher than 8.5% of household income. The expanded premium tax credits are credited with record enrollment in ACA plans but are set to expire at the end of 2025.

The impending expiration of the tax credits has thrust them into the center of contentious government funding negotiations, with the September 30 government shutdown deadline upon us. Democratic lawmakers are pushing for a permanent extension of the ACA subsidies and have indicated that they will not vote for a spending package that does not address certain key healthcare policy issues, including the expiration of the subsidies. Republican congressional leaders insist, however, that the subsidies should be dealt with separately from the government funding bill. The Republican-led House passed a stopgap bill to fund the government through November 21, 2025, which would also extend popular COVID-19-era telehealth flexibilities and the Acute Hospital Care at Home initiative. The bill, however, did not address the expiring ACA subsidies and, therefore, failed in the Senate. Despite Republican leadership’s hard-line stance, some Republicans have acknowledged a need to compromise and extend the ACA subsidies. For example, Sen. Lisa Murkowski (R-AK) filed legislation to extend the subsidies through 2027, but the proposal garnered little Republican support because it did not impose an income cap. The House Problem Solvers Caucus also floated a $200,000 income cap on the ACA subsidies as a compromise to reach an extension.

According to Congressional Budget Office projections, permanently extending ACA premium tax credits by September 30, 2025, would increase the number of Americans with health insurance by 3.6 million in 2030 and 3.8 million in 2035. Gross premiums for ACA plans would, on average, be 7.6% lower each year from 2026 to 2035 as a result of a healthier population base. According to the KFF (formerly the Kaiser Family Foundation), the expiration of the tax credits could raise ACA plan enrollees’ out-of-pocket premiums by approximately 75%. The impact of any extension, however, will be diminished if it occurs after the September 30, 2025, budget deadline. While the ACA tax credits do not expire until December 31, 2025, final premium rate notices for ACA plans are generally sent out by the end of September, and open enrollment for ACA plans begins on November 1, 2025. Any extension occurring after those dates would likely affect 2026 enrollment and require a special enrollment period.

In addition, the expiration of the ACA tax credits is expected to have a negative financial impact on providers. An analysis by the Robert Wood Johnson Foundation and Urban Institute found that expiration of the tax credits could cost providers more than $32 billion in revenue and increase uncompensated care by $7.7 billion in 2026. Hospitals are predicted to be the most affected, losing $14.2 billion in revenue and incurring $2.2 billion in increased uncompensated care. Physician offices are estimated to lose $5.1 billion in revenue, with $1 billion in additional uncompensated care. Approximately $5.8 billion less would be spent on prescription drugs, with $1.5 billion of uncompensated care for prescription drugs.

The Centers for Medicare & Medicaid Services (CMS) has announced a new prior authorization program applicable to Medicare called the Wasteful and Inappropriate Service Reduction (WISeR) Model. Traditionally, fee-for-service Medicare payments rarely require prior authorization.

The WISeR Model will be initially implemented in six states — Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington — and will use technology, including the use of artificial intelligence, to facilitate the prior authorization process for certain services that CMS has identified as “particularly vulnerable to fraud, waste, and abuse, or inappropriate use,” including skin and tissue substitutes, electrical nerve stimulators, and knee arthroscopy for osteoarthritis.

Private companies are invited to apply to participate in the WISeR Model and will receive payments if they can reduce the inappropriate use of selected services by Medicare fee-for-service beneficiaries. In the press release announcing the WISeR Model, CMS administrator Dr. Mehmet Oz stated that “CMS is committed to crushing fraud, waste, and abuse, and the WISeR Model will help root out waste in Original Medicare.”

However, House Democrats have pushed back. In a congressional letter to Dr. Oz, they  voiced their concerns that the WISeR Model “could erode the quality of coverage provided by Traditional Medicare and result in the delay and denial of necessary health care.” In August 2025, a second group of House Democrats wrote to Oz to “share [their] concerns” about the proposed WISeR Model, stating that “the use of prior authorization in Medicare Advantage shows us that, in practice, WISeR will likely limit beneficiaries’ access to care, increase burden on our already overburdened health care work force, and create perverse incentives to put profit over patients.”

CMS intends to implement the WISeR Model on January 1, 2026, and run the program for six performance years through December 31, 2031.

As an update to our August 1, 2025, alert on the proposed 340B rebate pilot program (the Pilot) and September 8, 2025, Health Resources and Services Administration (HRSA) Pilot FAQs update, a group of 163 bipartisan members of Congress came out in opposition to the Pilot and released a statement urging the HRSA to abandon the Pilot altogether. The statement reiterates many of the arguments that 340B covered entities have expressed their concern for, particularly those affecting the financial stability of rural and community hospitals that rely on the 340B program. This statement came just as the Congressional Budget Office released a report detailing the significant increase in spending — an increase of 565% from 2010 to 2021 — under the 340B program.

The Coalition for Health AI (CHAI) and the Joint Commission published “The Responsible Use of AI in Healthcare (RUAIH)” to provide guidance to healthcare organizations on the use of artificial intelligence (AI). The Joint Commission states that this guidance is in response to stakeholders’ requests for such guidance and is meant as an “initial, high-level document” that describes seven core recommendations that healthcare organizations should address: AI policies and governance structures; patient privacy and transparency; data security and data use protections; ongoing quality monitoring; voluntary, blinded reporting of AI safety-related events; risk and bias assessment; and education and training. The guidance does not provide specific, actionable items or recommendations, but it does indicate that CHAI and the Joint Commission will provide concrete guidance in the future. The Joint Commission and other accrediting organizations have also announced plans to develop voluntary AI accrediting and certification programs. As AI use becomes increasingly prevalent, healthcare organizations should be keen to continue to monitor their compliance with applicable law and consider guidance to bolster their corporate compliance programs as well as their data privacy and security policies and procedures.

A civil lawsuit is proceeding in the U.S. District Court for the Southern District of New York, where a patient who underwent fertility treatment is accusing the clinics involved of negligence, medical malpractice, breach of bailment, and deceptive business practices related to the storage, and ultimate destruction, of her extracted eggs. The plaintiff alleges that her eggs were mishandled when transferred from one fertility clinic to another for storage and were no longer viable when she sought to become pregnant. District Judge Dale Ho has allowed the case to proceed on the plaintiff’s negligence claim and has set the case for trial in the first half of 2026.

The case signals one of multiple potential areas of liability for fertility clinics in the storage and destruction of patients’ genetic and reproductive material. In addition to ensuring careful procedures to avoid issues of destruction and potential liability to individual patients with respect to their stored material, fertility clinics should be mindful of state and federal laws that may impact the manner in which they store or destroy certain reproductive materials, even if those methods are consistent with patients’ wishes. Please contact Goodwin’s Women’s Health and Wellness group with any questions.